Auto dealers not yet wholly confident in their digital retailing approach should find guidance at the Automotive Intelligence Summit later this month in Raleigh, N.C.

Spoiler: Online car sales are a people business.

Tim Cox, who is the co-founder and senior vice president of sales for CarNow, estimates that the car business has “only about 4% total end-to-end retail completion” online. Even for those that tout 100% of the process being online, things like paperwork are still analog, Cox said.

I interviewed Cox and five other digital retail technology leaders for this story, which is a prelude to July’s Auto Intel Summit, hosted by Cherokee Media Group, publishers of Auto Remarketing magazine. These interviewees will be session speakers at the event. The online agenda provides additional planning details. 

“Whatever digital tool(s) dealers use, the first thing is to figure out where you’re going,” said Cox, whose session, “DR: Your Direction Determines Your Destination,” will share ideas for dealers and OEMs and unpack end-to-end digital retailing.

“You have to know where you want to go, like planning a trip, before deciding whether to take baby steps into the pool or jump all in,” Cox said.

Several speakers stressed the missing link in digital retailing is not technology, but people, both consumers and those they engage with online and in the showroom.

While technology makes individual processes more efficient and transparent to improve lead generation, digital retailing works best when a “champion” within the dealership makes sure leads get human involvement.

“Customers who take time to fill out a lead need to have a champion within the store to love and focus on them,” Cox said. “This is why CarMax can outsell any other dealership … and people willingly pay more for that kind of experience.”

Pete MacInnis, chief executive officer for eLEND Solutions, poses similar thoughts at his session, “Is Digital Retailing Promising More than it can Deliver?”

“Customers are not saying they want to buy online, but that they want a better experience,” MacInnis said.

“The industry today isn’t focused on digital retail from a maturity perspective, but about an elegant look and feel to the consumer presentation. But in reality, what we’re talking about with digital retail is more elegant lead-gen,” MacInnis said.

The complexity of the car business — including the entire supply chain — complicates what digital retailing promises.

“There is a lot of silo-ing, both operationally and technically, and so sales and finance, for instance, work as separate profit centers and thus are departmentalized to consumers,” MacInnis said.

He noted that while dealer websites offer consumers self-help tools like online calculators, trade-in evaluation tools and finance apps, individually, they’re siloed, so too often what a consumer calculates for payment or trade value online isn’t what’s reality when they come into the store to work a deal.

“There is a lot of elegant presentation layers to what consumers see online,” MacInnis said, “but what the industry is lacking is the plumbing, the infrastructure behind it. Digital retailing hasn’t evolved yet; we have the presentation and stickiness down, but some pieces are missing.

“Digital finance has to be part of the upfront sales process. It has to be penny-perfect. When you can blend customer data, purchase transaction data, tax and license fees, and the customer’s credit qualifications and the lenders’ and factories’ programs — only then are you able to determine what the dealer finance profitability will be,” MacInnis said.

Despite years of promotion, digital retailing’s promise is still future tense.

“It’s one of the hottest topics in the industry, yet one of the least understood,” said Andrew Tai, chief executive officer at Motoinsight. “We talk about selling cars online, but digital retailing is about so much more. Frankly, consumers don’t want to buy online without ever visiting a showroom or test-driving the car. Car buying is still very much a touch-and-feel experience.”

From his perspective, the missing link in digital retail is consumer convenience and connection.

“Convenience does not discriminate across any category or demographic,” said Tai, whose session title is “Digital Retailing: Separating the Facts from the Fiction.”

Take online leads, for instance. “We mystery shop a lot of dealer websites, and almost 80% of the lead responses we receive in return lack any substantial value — they most often just ask when they can visit the dealership. We can do better than that as an industry, and digital retailing tools help with this,” Tai said.

“No doubt the purchase of a vehicle is complex, but this is why great dealers have great processes,” Tai said. “They may not always understand the hype around online selling, but dealers have been negotiating and selling cars by phone and e-mail for a long time, so the idea isn’t new to them.

“What is new today are the infrastructure and digital tools designed to streamline those processes and experiences,” Tai said. “That said, a dealer who struggles selling cars today the traditional way will also struggle via digital retail.”

He believes the coming five years will see more business technology innovation than the industry has witnessed across the last 15.

“Dealers [who master digital retailing] will start to play offense, winning market share and dominating their markets — or they’ll see digital retailing as a threat and will retrench and play a defense game, and those that do that will be merely postponing their demise,” Tai said.

In the session “Digital Retailing and the Role of FinTech: Credit First vs. Credit Last,” Tarry Shebesta, CEO for truPayments, will look at the role fintechs play within the online path-to-purchase.

Related to this topic, he believes dealer websites can be confusing for consumers. They spend hours researching and narrowing their vehicle selections, and once they move into financing at the dealership learn they cannot afford that vehicle based on their credit and down payment, among other factors.

That, Shebesta said, adds friction to the car-buying process and often defeats the deal.

A credit-first strategy helps dealer websites deliver up just that inventory that matches the customer’s affordability criteria, such as monthly budget, down payment amount, credit criteria and trade-in equity. 

This credit-first strategy, he said, helps dealers deliver a more personalized shopping experience.

A credit-first website app also creates browser curiosity, even for consumers not actively searching, that often piques interest and pulls even just-looking shoppers into the dealer’s sales funnel.

Equifax Automotive Services has its eye on helping dealers and lenders capture these opportunities.

“In the ideal world of the future, customers will be able to shop for and find the right vehicle for them, with the right payment, well before they walk into the dealership, and that is a big challenge,” said Craig Sims, vice president.

“The industry has a lot of systems and data out there, and the challenge we face as an industry is putting those pieces together in a way that improves the process for the customer and along the way provides some value to dealers, lenders and OEMs,” Sims said.

“It is hard for a dealer to follow shoppers across their buying journey, and so it’s difficult for a dealer to connect the Craig standing the showroom with the Craig looking at a specific vehicle on the website earlier,” he said.

“For the players out there, we’ve been working on putting these pieces together to help them make their box better so the consumer’s experience is enhanced,” he said, noting the right answers help shorten the shopping experience for consumers while building trust and confidence into the online-to-showroom transition.

The earlier in the shopping journey dealers can offer these answers to consumers, the more successful those connections will be for all parties. With the right data, Sims said, dealers can also better match area consumer interests and needs to the vehicle types stocked to improve sales and inventory turn.

“Most consumers shop on payment, and it is difficult for them to understand what a car payment will be before they walk into a showroom, but we at Equifax are well positioned to help lenders and dealers solve that problem for consumers wondering, ‘If I have $500 for a monthly payment, what can I buy?’ They don’t have that now,” Sims said.

Attorney Jason McCarter is a partner with Eversheds Sutherland and head of its U.S. automotive practice. His AIS session, “Legal Issues of Selling Online,” will survey top legal “thorns” associated with online car sales, including best practices for digital retailing and related remarketing services. 

McCarter will address state, federal and general contracting issues, including cross-border concerns, franchising and licensing, forms and advertising requirements, e-signature, collateral liquidation and dispute considerations.

“There’s a real risk that both the seller’s jurisdiction and the buyer’s jurisdiction will have an interest in regulating interstate offerings and transactions, but there are certain legal steps sellers and their vendors can take to anticipate and lessen that risk,” McCarter said. 

The viewpoint of CarNow’s Cox, summarizing changes he sees transforming digital retailing, is shared by many.

 “We have to understand that we are no longer in the car business, but in a service and people business,” he said. “That point isn’t even debatable anymore. The takeaway here is if I treat my customers the way I like to be treated, everything else in the selling process will take care of itself.”